Kevin M. Davis’ Post

MacCap has strong niche' in Hospitality finance and agrees wholeheartedly with attached article. As one our clients said to me recently " who would have thought that Hotels are preferred asset type over office or even multifamily?" Best JB

HOTELS ARE A SMART INVESTMENT AMONG OTHER ASSET CLASSES - Though financial seas are a bit choppy right now, the hospitality industry remains an attractive investment vehicle, especially with respect to several of its commercial real estate peers. As long as there is reasonable liquidity of capital, we expect to see increased hotel transaction activity as the year progresses. The two key driving forces are both long-familiar industry dynamics: Loans coming due. There is a significant amount of hotel debt that is maturing over the next two years. In fact, about $15 billion in hotel CMBS loans alone are coming due in the next two years, according to a CoStar report earlier this year. PIPs. Even if their loans aren’t reaching maturity, there are a slew of properties now facing impending property improvement plans or other capital needs. It’s a double-edged sword: Many properties survived the pandemic by raiding formal CapEx and FF&E reserves to help keep loans solvent with lenders, thereby with the cooperation of the brands, thereby eluding scheduled property improvement plans (with the blessing of the brands). In some cases, capital improvements were restricted to emergency situations like a leaky roof or un-repairable heating plant. Now, in many cases, PIPs can no longer be deferred and major brands are anxious to resume the regular schedule of property improvements that help keep properties competitive in a given market. At the same time, supply chain constraints and construction costs, along with availability of skilled labor, in many cases favor “buy and upgrade” over new construction. Thus, distilling the post-pandemic marketplace, the greatest opportunity is either through refinancing an existing loan or through the recapitalization and subsequent renovation or repositioning of a buy-sell transaction. Either way, the debt markets hold the keys to both executions. https://lnkd.in/ertRBvnn #propertysquarellc #FranckRobert #rivieramaya #mexico #caribbean #centralamerica #RealEstate

HOTELS ARE A SMART INVESTMENT AMONG OTHER ASSET CLASSES - Though financial seas are a bit choppy right now, the hospitality industry remains an attractive investment vehicle, especially with respect to several of its commercial real estate peers. As long as there is reasonable liquidity of capital, we expect to see increased hotel transaction activity as the year progresses. The two key driving forces are both long-familiar industry dynamics: Loans coming due. There is a significant amount of hotel debt that is maturing over the next two years. In fact, about $15 billion in hotel CMBS loans alone are coming due in the next two years, according to a CoStar report earlier this year. PIPs. Even if their loans aren’t reaching maturity, there are a slew of properties now facing impending property improvement plans or other capital needs. It’s a double-edged sword: Many properties survived the pandemic by raiding formal CapEx and FF&E reserves to help keep loans solvent with lenders, thereby with the cooperation of the brands, thereby eluding scheduled property improvement plans (with the blessing of the brands). In some cases, capital improvements were restricted to emergency situations like a leaky roof or un-repairable heating plant. Now, in many cases, PIPs can no longer be deferred and major brands are anxious to resume the regular schedule of property improvements that help keep properties competitive in a given market. At the same time, supply chain constraints and construction costs, along with availability of skilled labor, in many cases favor “buy and upgrade” over new construction. Thus, distilling the post-pandemic marketplace, the greatest opportunity is either through refinancing an existing loan or through the recapitalization and subsequent renovation or repositioning of a buy-sell transaction. Either way, the debt markets hold the keys to both executions. https://lnkd.in/e39jV-3F #propertysquarellc #FranckRobert #rivieramaya #mexico #caribbean #centralamerica #RealEstate

𝗛𝗼𝘁𝗲𝗹 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗜𝘀 𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝗙𝗮𝘃𝗼𝘂𝗿𝗮𝗯𝗹𝗲 𝗔𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻 According to the latest 'Canada Hotels & Chains Report 2024' by Horwath HTL, the hotel sector has made a remarkable recovery from the 2020 downturn. By the end of 2023, the industry boasted strong fundamentals with an Average Daily Rate (ADR) of $200 and Occupancy Rates rebounding to pre-pandemic levels at 66%. This resurgence has created a vibrant environment for buying and selling hotel properties. In 2023, the Revenue Per Available Room (RevPAR) reached $131, marking an 18% increase over 2022 and a 21% rise from 2019 figures. Toronto led the charge with an impressive occupancy rate of 73.4%, significantly higher than the national average. Investor confidence is soaring, as evidenced by transaction volumes in 2023, which climbed to $1.72 billion. A substantial 68% of these transactions occurred in major metro markets, pushing the national average price per room to an all-time high of $175,000—a 45% growth year-over-year. Additionally, improved debt financing conditions, supported by government funds and private lenders, have made 2023 a standout year for hotel investments. With interest rates expected to be cut by July, ahead of the U.S., the Canadian dollar could depreciate against the U.S. dollar, potentially boosting Canada's appeal as a cost-effective destination for American tourists this summer. The year 2024 is projected to see more buyers than sellers in the hotel asset market. With limited available properties, we might witness a rise in Office to Hotel Conversions to meet demand. At Paramount we’re not only a Real Estate Brokerage, we are solution providers. Start by visiting our website to learn more: www.paramountrealestate.ca. While you’re there, watch our video 🚀 Join our Passive Investing Program for commercial real estate, where we handle the complexities, and you enjoy the benefits - think of it as 'mailbox money'. 💌 We look forward to working with you. #paramountrealestategta #passiveincome #commercialopportunities

U.S. Hotel Real Estate Market Predicted to See Steady Increase in Transactions and Financing. U.S. hotel brokers anticipate an increase in transactions over the next few years, particularly in the $10 million to $20 million segment. Financing for these transactions is becoming more accessible. Contact us for a no obligation BOV (Broker’s Opinion of Value) for your hotel. #hotels #hospitality #hotelfinancing #hotelbroker

Hotel brokers see gradual, steady improvements in transactions and financing Buyers and sellers closing deals in the $10 million to $20 million segment https://lnkd.in/eUqADBqx #hotels #hospitality #transactions #financing

Incoming hot assets: hotels. Lately, these properties have been drawing some attention, including ours  👀 Following a challenging post-pandemic period, we’ve seen investors’ interest in hotels increase as performance continues to improve and, while still not at pre-pandemic levels, US foreign visitation levels rise. During Q3, the sector demonstrated stability, with occupancy reaching 63% (only 3% below pre-pandemic levels), average daily rates experiencing more than 2% growth YOY, and revenue per available room exceeding pre-pandemic benchmarks, according to the National Association of Realtors and CoStar data. Yes, challenges remain. Among them we continue to see: • High cost of debt • Workforce shortages • Rising property insurance premiums • Increasing operating costs However, the sector also has some factors working in its favor: • Strong demand • Significant volume of acquisitions set for conversions, impacting existing supply • Dampened new construction due to high costs And then, even though transaction activity has been lower compared to Q3 2023, the number of transactions has risen by 10%, along with an increase in sale price per room and total dollar volume. But with loans set to mature in the next year and refinancing not always being possible, we will probably see more assets hitting the market, leading to a higher transaction volume. This presents an opportunity for investors to either convert spaces for new purposes or add value to existing hotels, especially in urban markets. Have you been looking to acquire hotels lately? We can help with the acquisition process by financing your earnest money deposit during the due diligence phase, so you don’t have to freeze your capital and can focus on more opportunities. Visit our website https://www.duckfund.com/ for more information or schedule a call with our team to learn how we can assist you: https://lnkd.in/eS7fhaec #CommercialRealEstate #SoftLanding #CREMarketTrends #CREMarket #RealEstateInvesting #CREIvestor #HotelInvestment #HotelSector

Getting a deal done for a hotel has been difficult over the past few years, with inflationary pressures and banking woes headlining the difficulties. That could start to change in the second half of 2024, hotel executives say. #hospitality #hotelinvestment #hotelsandresorts #financing

Thank you to Hotel Investment Today for sharing the LW Hospitality Advisors Q2 2024 Hotel Sales Survey.   Key highlights include:   - Comparing Q2 2024 with Q1 2024 ----- Transaction volume: the number of trades increased approximately 36 percent while total dollar volume grew roughly 63 percent. ----- Pricing trends: The average sale price per room rose by 21%, reaching $279,000. -Geographic concentration: California, Florida, and Georgia accounted for 42% of the national quarter total number of sales, underscoring the continued attractiveness of these markets. - Debt availability: The sector continues to see robust debt financing, as evidenced by several high-profile acquisition financings and refinancings.   Looking ahead, we anticipate increased hotel sale transaction activity due to several factors: - The wave of debt maturities is beginning to materialize, putting pressure on capital-starved hotels. - Many owners who used Reserve for Replacement funds to service debt are now facing refinancing challenges in a high-interest rate environment. - Some property owners may choose to dispose of assets or surrender keys to lenders.   It's worth noting that high-quality assets with strong in-place performance are trading at aggressive cap rates, driven partly by ample equity earmarked for the lodging sector.   We expect U.S. hotel sale pricing to remain robust for top-tier properties with solid cash flow. Link to the article will be in the first comment.   #hotelindustry #marketupdate #hospitality

More #hotel deals should be possible as the #CMBS market opens up and #investors have more clarity in terms of pricing. https://bit.ly/4ciMzDN #hoteltransactions #hotelinvestment #hoteldeals #debtmarket